The Liberal Democrats are considering proposing to abolish the ceiling on
national insurance contributions and removing the lower 10% income tax band as
part of a package of new tax policies.
The move would dramatically increase tax bills for those on middle to higher
The idea is among several designed ‘to stimulate debate and discussion’ and
will be presented ahead of next week’s party conference in Blackpool.
The party aims to re-draft its policy in time for the 2006 conference after
concerns that internally popular proposals for local income tax to replace
Council Tax would result in very high marginal rates.
The party also needs to offset its plans for a higher tax rate for incomes
over £100,000, which would result in Britain having a top rate of tax well above
the OECD average.
Some of the ideas bear the hallmark of intervention by party leader Charles
Kennedy, who appeared to get wrong-footed on the interaction of LIT and current
income tax during the general election campaign.
Legislation on the NICs changes to be brought forward in the autumn following publication of 'the full effects of the changes to Class 2 and Class 4' in the summer
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